Category: Sales Channels

Google’s Froogle has been an also-ran among the giant comparative shopping sites, being out-distanced by the likes of eBay’s Shopping.com and Scripps’ Shopzilla. Indeed, Google’s apparent inattention to Froogle has been a mystery.

But this week, Google turned on the burners for Froogle. It announced that it will provide sales-and-inventory search programs for big box and local merchant retailers with ShopLocal, and StepUp, a Bay Area startup that now provides online inventory search for 1,200 retailers in 8,000 locations. Roughly 75 percent of StepUp’s merchant base, or 900 retailers, come from outside the Bay Area. StepUp also has 250 Bay Area specialty retailers, grandfathered from its acquisition of MarketSquare.

The Froogle announcement is actually the first concrete manifestation of GoogleBase, a do-it-yourself classifieds and Yellow Pages builder. While few details of GoogleBase have been released, its mere existence has caused some consternation with local media and commerce companies, who now finally understand that they’ll be directly competing with Google.

It’s no surprise that TV station websites remain underwhelming in most markets. They still think of the Web as a promotional platform. But since 2003, a number of stations have begun to remake themselves, leveraging their local presence with content and advertising. Some are making a dent in the local advertising market, with earnings running from $300,000 to over $1 million in larger markets.

Station groups like Clear Channel are doing it on their own. Most, however, have signed partnerships with TV website specialists, whose ranks include WorldNow, with 147 stations; Internet Broadcasting Systems, which has 70 stations, including many top markets; and relative newcomer Broadcast Interactive Media. Broadcast Interactive will have 70 stations by the end of the year, but mostly in smaller markets – the disadvantage, perhaps, of starting after WorldNow and IBS.

BIM Chief Timur Yarnall shared his sense of where the marketplace is going with The Local Onliner. The best situations for TV Websites are when they go local and create new revenues from new customers, rather than bundling in existing contracts with car dealers and other traditional TV advertisers, says Yarnall. Homebuilders, real estate brokers and mortgage advertisers are examples of new customers who haven’t previously worked with TV stations. “The website clinches it. Otherwise, these guys would not have gone near TV.” More from our discussion is below.

For a short time, eBay experimented with a Local Trading unit, which specialized in autos, sofas and other things “too heavy to ship.” But in 2001, it closed down the unit, which didn’t fit into its plans for eBay Autos, greater transaction fees, etc. By doing so, eBay took the chance that it would be left vulnerable to competitors filling the void.

Sure enough, jump to 2005, and a flurry of companies are ready to take advantage of the increasingly clear relationship between local auctions, classifieds and transactions. One of them is Santa Clara-based LiveDeal.

Launched by a former eBay engineer in 2003, the 25-person company lists 200,000 items for sale every day, and gets about 500,000 unique viewers a month. LiveDeal’s big news this month is that it has landed $4.8 million in financing, including $3 million from TorStar, the progressive publisher of The Toronto Star and dozens of smaller community and daily papers in Ontario. Other investors in this round include Draper Richards, a VC firm, and individual Silicon Valley investors.

We had the opportunity to talk with Vice President of Development Steve Harmon about the company’s progress. Details from the conversation, and more background, continues below.

Cox Enterprises has been largely silent on the local front since the high profile failure of Cox Interactive Media and its city guides in 2001. But the local media giant is quietly re-entering the local waters with the creation of a new “Cox Search LLC” division, described as “a strategy and development group created to develop interactive products.”

Cox Search’s first product is an Internet Yellow Pages/social network named “Kudzu,” after the invasive vine spreading over the southeast. Kudzu was set in motion in October 2003 and formally launched in August 2005, after months of delays. Kudzu’s pilot is set in Atlanta, Cox’s home base, and covers the entire Atlanta metropolitan area, rather than just focusing on the urban center, as Craig’s List tends to do.

A quick look at the site reveals a full-featured, highly searchable product, with 100,000 + local service listings and more than 13,000 user reviews (some motivated by the promise of a $10 gas card in return for 10 reviews). Like a good IYP, users can search by keyword or category, as well by distance or review. The site also features a number of “how to choose” guides.

We had an email exchange with Cox Search Vice President and General Manager Tom Bates. Highlights of the exchange, and additional background, are below.

Local advertisers have discovered the Internet and will boost their advertising 26 percent to reach $3.2 billion this year. But after that, they’ll grow just 11 percent per year through 2010, reaching $5.3 billion, according to a new Jupiter Research report, “US Local Online Advertising Forecast, 2005 to 2010.”

According to Jupiter’s analysts, local advertising will fall short in its transition to the Net, as most local businesses will be slow to jump online. Instead, local online advertising will remain centered on national firms targeting on a localized basis.

Why? The portals won’t invest in local sales forces, and existing local advertisers see better leads coming from word of mouth, magazines, trade shows and other offline marketing tactics. “They are just beginning to build databases of email addresses,” notes Jupiter.

Yellow Book has clawed its way to a prominent role in the Yellow Pages industry, and has grabbed 50 percent of the market for Independent Yellow Pages publishers. Now it is rumored to be in takeover talks with Google.

Would Google go for it? To be sure, Yellow Book is compelling in a number of ways. It has a national footprint, increasing market share, strong leadership, a scrappy, non-union sales force – and hardly any preconceived Internet strategies.
Google could certainly leverage Yellow Book’s sales force. It is conceivable that the search company may soon hit a plateau with the number of advertisers willing to self-provision their own ads over the Web. Yellow Book’s feet-on-the- street would conceivably boost penetration, while upselling advertisers on a number of fronts.

Yellow Book CEO Joe Walsh is happy to fan the flames of such rumors. Speaking at Kelsey’s Directory Driven Commerce conference in Denver, Walsh noted that “in a lot of ways, a good Yellow Pages business complements a geo- and- search business. I’d be shocked if you don’t see partnerships happening. It just makes so much sense.”

But at a Goldman Sachs’ investor conference on Sept. 22, Diller surprisingly devoted more time to CitySearch than IAC’s other companies. He noted that CitySearch is now operating in the black, and has seen a rise in monthly unique users from eight million in 2003 to 23 million today.

Diller’s positive comments reinforce outward confidence in the division by IAC, including its recent move to the new IAC west coast headquarters in West Hollywood, and its recruitment of high level executives to work under CEO Briggs Ferguson.